Lifetime Value

What is Lifetime Value?

Lifetime Value or LTV is a prediction of how much money you can expect to make from a customer before they churn. This information can help you to make important decisions about your business.

A high LTV is a good thing! It means you can expect to make lots of money on customers before they cancel. So you can afford to spend a bit of money on marketing, on boarding, support, and so on to acquire them in the first place.

How is Lifetime Value calculated?

Though the lifetime value calculation is simple, it relies on two other metrics that can be tricky to calculate: User Churn and ARPU.